Hello, everyone, and welcome to the Vopak Analyst Presentation Full Year twenty nineteen. Throughout the call, all participants are in a listen only mode. Afterwards, there will be a Q and A session. Now I hand the call over to Laurent
Head of Investor Relations. Please begin. Good morning, and welcome to Vobox Q4 and Full Year twenty nineteen Results. My name is Laurent de de Graaf, Head of Investor Relations. Today, our COO CEO, sorry, Ilkka Hoekstra and CFO, Gerard Paulydez, will guide you through our latest results.
Our COO, Fritz Ulrich, is here as well, and we will be available for questions during the Q and A. We will refer to the full year twenty nineteen analyst presentation, which you can follow on stream and download from our website. After the presentation, we will have the opportunity for Q and A, first by the analysts with us in the room and thereafter by the analysts that are dialed in. A replay of the call will be made available on our website. So before we start, I would like to remind you of our safe harbor for any forward looking statements.
This disclaimer is applicable to the entire conference call, including Q and A. So with that, I would like to hand over to Ilkow.
Thank you, Laurence. A very good morning to those who joined us here in Rotterdam and a very good morning for all of you joining us in the call. It is my pleasure to share with you our fourth quarter and full year results for the year 2019. I will give a short introduction on the results and the execution of our strategy. Then I'll hand it over to Gerard who will elaborate on the financial performance.
So let's begin with Slide four and review the highlights. We continue the delivery of short term performance and long term value creation. We realized strong results and significantly increased earnings per share. We made important steps in the execution of our strategy both in our portfolio and digital capabilities. We will start the share buyback program to return EUR 100,000,000 to our shareholders.
And with our strong competitive position and global diversified portfolio, we are very well positioned for future opportunities to create value for all stakeholders. EBITDA in 2019 was CHF $830,000,000 reflecting good performance of new assets and solid business performance in today's market conditions. Earnings per share significantly increased. Our occupancy rate was 84%. This lower number reflects IMO twenty twenty capacity conversions during the year and ongoing tougher market conditions at oil hub terminals as market segments as other market segments remained solid.
Our resilient portfolio and continuous focus on safety, service and costs has proven to be an advantage across a range of business climates. As for the execution of our strategy, during the years 2017 to 2019, we have been transforming our portfolio through EUR 700,000,000 of divestments and EUR 1,000,000,000 of investments in new growth projects. Allow me to place that in context. We successfully divested almost 5,000,000 cubic meters of oil capacity, mainly in Europe and bolstered our hub positions. We prepared our oil hub terminals for IMO twenty twenty and expanded storage capacity in future growth markets.
We expanded our LNG business in Pakistan and Colombia and started the construction of new industrial terminals in China and The U. S. We also made progress with our new energy focus. We made our first investments both in hydrogen and solar. Looking at 2019, we've added 1,800,000 cubic meters of new capacity to our portfolio with expansion projects in Pengerang, Singapore, Mexico and Brazil and new terminal locations in Panama, Colombia and Canada.
At the start of 2020, another 1,500,000 cubic meter of capacity is currently under construction globally. Similarly, the delivery of our digital strategy has progressed well last year. We continued the rollout of our new cloud based system for our terminals. Growing Vopak's digital capability and using data are key to our position as the leading independent tank storage company. We believe our portfolio is well positioned for future opportunities and we're committed to the delivery of results with constant attention for safety and service.
For 2020 and beyond, we continue the course we set in previous years, which is focus on performance and value. Let me recap our view on the business environment and product markets in which we operated in 2019. Starting with chemicals. The recent slowdown in global economic growth has not affected our earnings in 2019. We experienced generally solid occupancy rates at our chemical terminals.
Conditions for our customers in the chemical industry are currently more challenging, but we remain positive for demand of chemicals in the long term. In the coming decades, we see growing global demand driven by increased industrial needs and manufacturing of business and consumer goods. The chemical market announced in the last few years sizable new investments in chemical production globally. U. S.
Chemical investors continue to take advantage of cheap shale ethane feedstock and new petrochemical projects take shape, industrial terminal opportunities for Vopak such as our project in Corpus Christi in The United States. In Asia, long term outlook supports developments of petrochemical projects close to these growing end markets, enabling, for instance, our industrial terminal expansion in Chaojing in Shanghai. So looking forward, operational performance on safety, service and cost is crucial to keep earning the trust of our chemical customers. I believe it's the joint responsibility of the industry and service providers like Vopak to keep investing and lift the sustainability performance as a sector. We remain focused on daily service delivery and improving our infrastructure.
The sentiment in the oil market has been negative through 2018 and 2019 with a backwardated pricing structure. More recently, the oil markets have been oversupplied as geopolitical tensions and mostly the coronavirus impact demand. Our earnings were impacted by IMO 2020 and weaker market conditions in oil, and particularly in Southeast Asia. So during the year, we have adopted our infrastructure in the key hub locations, Rotterdam, Singapore and Fujairah, and signed long term contracts with our customers. This conversion cost higher than normal out of service capacity.
I believe OPAC did make the right choices throughout the conversion program. Our IMO capacity is now fully operational and customer feedback has been positive. The fuel market has not experienced any unexpected disruptions and low sulfur fuel has been the dominant bunker fuel early twenty twenty. Blending capacity and segregation of fuels and supply and demand of low sulfur fuel will impact the fuel market dynamics in 2020 and the years onwards. At our import and distribution terminals for clean petroleum products in major deficit markets, we continue to see a strong business performance.
In the gas market, we experienced strong growth. Global LNG trade has more than doubled in the last decade and 2019 was another record supply year for LNG. LNG supply has further grown and imports in China and Europe increased substantially on the back of this surge for end markets. This is also demonstrated by the record volumes our gate terminal in Rotterdam handled last year. Our earnings were not affected with capacity rented under long term contracts.
The LPG market also continues to grow, mainly driven by The U. S. Shale production. As a consequence, LPG is increasingly being used as a chemical feedstock. Despite higher seasonal propane prices, European crackers have continued to favor LPG over naphtha even throughout the winter.
And residential fuel of LNG in emerging markets like India has absorbed part of the excess LPG supply. Our earnings benefited from new LPG export from our RIPET terminal in Canada that started operations in 2019. So we see the segment of gas showing structural growth and more infrastructure is needed to cater for this growth. We target to expand our portfolio with new investments in gas in the coming years. Now moving on to new energy.
We see a sharp rise in production of renewable energy globally, and opportunities for Vopak will emerge for storage of electricity in either liquid or gas. Our new energy strategy therefore focuses on hydrogen, solar and flow batteries. In 2019, we made our first investments in hydrogen and solar to develop develop and understand the logistics value chain and we continue to look for investment opportunities. We currently have no earnings coming from the segment, but we are investing in capabilities. In 2020, we aim to take an FID on a pilot hydrogen investment in Europe.
So to sum up, we delivered short term results despite several market challenges in a competitive environment. On to strategy execution. Allow me to recap the deliverables of our strategy execution for the period twenty seventeen-twenty nineteen and you are familiar with these strategic objectives. We have delivered significant growth and invested €1,000,000,000 in growth CapEx in the last three years. Our sustaining and service improvement CapEx is managed within the spending limits with a total spend of around CHF $750,000,000.
And in the last three years, we spent more than CHF 90,000,000 in IT. And we have driven costs down and delivered on the efficiency program as promised. Our cost level of 2,009 amounted to CHF $633,000,000. Our strategy is unchanged and we continue the course we set in the previous years with focus on performance and value. For 2020 and beyond, we will further strengthen our cost culture and expect to compensate for annual inflation.
Our sustaining and service improvement CapEx approach is unchanged. We may spend EUR $7.50 to CHF $850,000,000 for the coming three years subject to policy changes, discretionary spending decisions and the regulatory environment. We will manage IT CapEx with an annual spend between CHF 30,000,000 and CHF 50,000,000 to complete the build and global rollout of Vopok's digital terminal management system. Our growth investment outlook for 2020 is unchanged and could amount to CHF300 million to CHF500 million. So let me summarize our key messages before I hand over to Gerard.
This year, we delivered strong financial results and we've executed our strategy with a clear transformation of our portfolio. We continue the course we set in previous years and we are committed to keep storing vital products with care to make a meaningful contribution to a more sustainable society enabled by our financial performance. So moving on to the next part of this presentation, I'd like to hand over to Gerard, who will explain more about our financial results.
Yes. Thank you, Eelco, and a very good morning to everyone. I will update you now on the financial performance and financial framework. And for more details, I refer to our 2019 annual report as we published this morning. The annual report reflects our integrated approach in reporting on financial sustainability and governance performance, including our strategy and value model.
Now let's turn to the next slide and look at some of the financial performance details. In 2019, we realized a strong EBITDA and significantly increased earnings per share and showed momentum with our portfolio transformation. Our cash performance and balance sheet support continued growth investment and increased distributions to shareholders by growing our dividend with 5% and the share buyback program. This results from our discipline to execute our strategy. Earnings measured as EBITDA excluding exceptional items came in at €830,000,000 an increase of almost €100,000,000 reflecting good performance from new assets but also revised accounting for land lease commitments as per IFRS 16.
The net profit was €358,000,000 with an earnings of €2.8 a significant increase of 23 compared to last year. In addition, net profit from exceptional items was €213,000,000 Our financial framework and priorities for cash are unchanged, and we have flexible access to the debt markets. For 2020, we will continue to invest and allocate the majority of cash from recent strategic divestments to growing our portfolio. To increase our distribution to shareholders, we start a €100,000,000 buyback program and we increased our dividend. Let's go to the next slide.
Let me take you through some of the 2019 results. As of January 1, we started to apply IFRS 16 accounting for leases. And in 2019, in our results announcements, we've provided pro form a numbers that exclude IFRS 16 to allow a fair comparison of results compared to previous years. Furthermore, Q4 is the first quarter in which you will see EBITDA discontinued from our divested assets in Amsterdam and Hamburg. EBITDA was €830,000,000 as already mentioned.
And adjusted for IFRS 16 effects, currency effects and divestments, the EBITDA grew by €51,000,000 compared to last year. Strong performance in Asia and The Middle East reflect contributions from new industrial terminals in Malaysia, PT2SB, and our oil hub terminal in Fujairah that performed well in the dynamic business environment in that region. Performance in The Americas was supported by the good business environment in the chemical storage and performance of the new assets in Deer Park as well as in Canada. In Rotterdam and Singapore, IMO twenty twenty capacity started to be delivered with contracts in place with new and existing customers. Subdued oil market conditions in Rotterdam and Singapore continued.
We delivered a return on average capital employed of 12.4% in 2019. Continuing with our quarterly EBITDA comparison, Q4 versus Q3. EBITDA for the fourth quarter came in at $2.00 €5,000,000 explained mainly from positive effects from various commercial settlements, good performance from IMO 2020 capacity and growth projects replacing divested EBITDA. The strong performance in Asia and Middle East was primarily explained by Singapore as a result of IMO twenty twenty capacity contributions and other income from various settlements. The China and North Asia division includes resilient performance of our industrial terminals and the final settlement related to our terminal in Haiteng.
In Europe and Africa, the contribution from IMO twenty twenty capacity in Rotterdam was partly offset by tank cleaning costs and by disposals. The reduction of the LNG division was mainly caused by one off IFRS 16 effects coming into force in Q4 for the LNG part. Divisional segmentation next. Occupancy rate in Europe and Africa and Asia and Middle East reflect IMO conversion taken back into operations in Singapore and Rotterdam. EBITDA growth is partly cut back by the divestment effect of Amsterdam and Hamburg.
Chemicals and gas occupancy rates have been stable,
which
is mostly noticeable in the EBITDA performance of our Americas and LNG divisions. Occupancy rate in the China and Northeast North Asia reflect the competitive pressure at chemical distribution terminals mainly from local players. However, at the proportional level, the reported numbers in China and Northeast are much more stable. Let's look at occupancy rates further. In 2019, our occupancy reflects the execution of conversion activities and the current oil market conditions at oil hub terminals.
In the fourth quarter, IMO capacity has been delivered back to the market with commercial contracts in place for practically all capacity. At the same time, adverse market conditions persist and we have out of service capacity for maintenance and inspections, in particular, in Bottlec, Europoort and Singapore. This has offset the positive occupancy of the utilization of IMO 2020. The occupancy rate is trending upwards during the fourth quarter. Let's have a further look at fuel oil.
We've repositioned our fuel oil network and we're very satisfied with the current exposure. Our current portfolio covers the right locations, including the three major bunker ports in the world, Singapore, Fujairah and Rotterdam. Secondly, we've converted capacity at each terminal to be low sulfur fuel oil oriented and less capacity in high sulfur and marine gas oil, MGO. A large proportion of capacity remains flexible to accommodate market dynamics with segregation and blending to service our customer. Viscosity of products also influence options for shippers.
Lastly, we have contracted the right group of customers consisting of major oil refiners, global shippers and some but less fuel oil traders. Very low sulfur fuel oil availability has been good in the market, but supply and demand needs more time to settle. We've not observed compliant disruptions. Our 3,500,000 cubic meter capacity is well positioned and operates in the range of 85% to 95% occupancy for consolidated assets. Turning to the cash flow.
This year, we delivered a good cash flow with more than €700,000,000 cash flow from operations. This resulted in almost €350,000,000 free cash flow before growth. Our investment momentum is clearly visible and we invested €500,000,000 in growth projects, in line with our outlook. Our debt position at year end decreased to €1,700,000,000 and the senior net debt to EBITDA ratio was 2.75 at the end of the year. With our portfolio performance and strong balance sheet, we are well positioned to support growth in 2020, fund the buyback and the increased dividend.
Continuing with investments. We break down our investment in growth investments and other investments. In the period 2017 to 2019, we invested €1,000,000,000 in growth. These investments are done through CapEx in our subsidiaries or equity injections in joint ventures and associates and includes also acquisitions. For 2020, growth investment could amount to 300,000,000 to €500,000,000 as previously communicated.
Guidance for sustaining CapEx and service CapEx is in the range of $750,000,000 to €850,000,000 for the forthcoming period. The previous period was managed within the range of $750,000,000 and we spent about $715,000,000 of that range in the last three years. Larger sustaining CapEx investments are subject to separate FIDs and service improvement projects with a clear value proposition in the hub location may also impact our spending in the range. To complete the build and rollout of Vopak's digital terminal management system, we expect to spend annually €30,000,000 to €50,000,000 in IT CapEx over the next three year period. We are now at release five and implemented our digital terminal management system at eight of our terminals.
Earlier this month, our major location Deer Park was switched on and covered expanding functionality in the software. Two of our terminals in Singapore are live and the remainder of Singapore and also Rotterdam are planned for 2020 and 2021. Becoming more digital is key to create long term value and keep our position as the leading independent tank storage company. Our balance sheet. Our financial framework and priorities for cash are unchanged.
We aim to have a balance sheet with sufficient flexibility to execute strategy and manage market conditions. The senior net debt to EBITDA ratio was 2.75 and in the middle of our target leverage range of 2.5 to three and compared to 2.99 in the middle of the year. Value creation through gross CapEx of €500,000,000 in 2019 was well managed within this framework. Moving to shareholder distributions. January, we divested the terminal in Algeciras, which marked the completion of the transaction of the three European oil terminals in Amsterdam, Hamburg and Algeciras.
The transaction led to an exceptional gain of €200,000,000 The majority of the cash from these strategic divestments will be allocated to grow the portfolio. And to increase our distribution to shareholders, we start a €100,000,000 share buyback program. Turning to some proportional data. We provide additional performance insights based on proportional consolidation, reflecting the economic interest of Vopak in our entities. 2019 proportional EBITDA was $930,000,000 of which the proportional EBITDA from joint ventures is around EUR 400,000,000.
Both these numbers, by the way, are before application of IFRS 16. This proportional EBITDA shows an increase of more than 10% or €100,000,000 reflecting the performance of new joint venture assets RIPET in Canada and PT2SB in Malaysia as well as the acquired LNG terminals. Including IFRS 16, the proportional EBITDA for 2019 is EUR $980,000,000 and that compares to the IFRS consolidated EBITDA of EUR $830,000,000. Let me recap the financial messages. 2019 was successful.
We delivered strong EBITDA and good cash flow and significantly increased earnings. Our financial framework and priorities for cash are unchanged and we continue to invest. To increase distribution, we start a buyback program and increase our dividend with 5%. Our occupancy was low, but our results were good. Looking ahead, let me close out with some comments on what is going to happen going forward.
We aim to grow EBITDA over time with new contributions from growth projects and IMO converted capacity. Gross investment could amount to 300,000,000 to 500,000,000 in 2020 alone. In 2019 and 2020, we target one to three industrial terminal opportunities and one to three gas investment opportunities. Our views on sustaining and service CapEx and IT CapEx and our approach has not changed, although policy changes, the regulatory environment and additional discretionary decision may impact the amount of CapEx that we allocate to these categories. We continue to focus on cost and further strengthen our cost culture also in 2020.
In terms of new energy and innovative technologies, we aim to expand our capital allocation. In 2020, we will execute the share buyback program and we continue to set the course strategically as we set it in the past with a focus on performance and value. Lastly, on June 10, we intend to have a Capital Markets Day, an update on our strategic direction and business environment and choices available to us, opportunities. We will conduct the Capital Markets Day in Rotterdam and we'll include a visit to one of our facilities in the port. We will talk then about our views on the markets portfolio developments as well as the financial framework.
During the day, we aim to give you more insights in our digital agenda and application thereof in our network of terminals. This ends the prepared remarks. We will now turn over to some questions. And I will hand back to Elko for that.
So that concludes our presentation. We will take questions. First, I would suggest that we allow people who are sitting in the room to ask some questions. And after that, we will facilitate the questions from the people that have dialed in. Who would like to take the first question?
Luk van Beekturk of Betacom. Well, first, a question about IMO 2020. You mentioned that all your capacity is now available and covered by contracts. But I read in the markets that there's been a very high level of activity with vessels bunkering at the start of 2020. Is that something that also would give a boost to your Q1 contribution?
Or is that spread out over the contract?
First of all, let me say something about the numbers and then maybe Eelco can cover some of the market dynamics that we've seen in the early market in January. So in terms of our capacity, as you know, we have completed our activities. It's mostly contracted. We've created some room for operational flexibility. But in essence, the capacity that we've created, the 3,500,000 cubic meters is expected out.
The exception to that is Panama, which is, as you know, greenfield facility. And there, we are still in the process of starting up and filling the capacity with customers, but we've reached a reasonable level of occupancy also for Panama. So in Q4, what you will see in the occupancy, we had an occupancy which came back from the lows that we've observed in Q3, but it was also still building up. And the commercial contribution is also still building up. The first customer experiences are good with the segregation of our facilities with the different streams.
So we're getting settled into that new market and we will see a full contribution of that in 2020. Now maybe on the market dynamics, Elko, if you could give a flavor of that?
The dynamics on what we have experienced in the market is, first of all, I had to repeat a bit what Gerd said. First of all, compliance is high on IMO 2020. That's our first observation across the globe. So the larger ports are complying and making sure that the rules and regulations are upheld. The second thing we see is that we have invested in capabilities particularly to handle low sulfur fuel oil.
So we've made that available across the globe. And our initial assessment is that that assessment or that insight has been the correct one because what we've seen is that there's been if you look at the study sort of two years ago, there was a consideration that marine gasoil will take a large part of the total bunker volume and that is not taking place. The the reality on the ground that we see in our terminals in Rotterdam, Punjera, and Singapore is that there's quite a high volume of low sulfur fuel oil that has been delivered to market where refineries have taken care of that production. The third thing that we see is that there is a that the operations of the bunkering and the customer satisfaction, Gerard mentioned, has been very high and has given us great confidence. So we feel, in today's environment, good about the choices that we've made.
Obviously, and this is sort of the second remark, if you look at the price differentials that we've seen happening in the market, we've seen that the low sulfur fuel has been priced at very high levels in the early stages, dropping off a bit. And we see that those who had scrubbers have been able to make use of the cost advantage, at least in the early stages. I expect the market to settle for another four to six months to have sort of a final non equilibrium, but at least it will give us a sense of where supply and demand will fall. But early indications is that how the markets are moving and how customers are behaving is that we've made the right choice and that's where the confidence comes from that Gerard just radiated on the, let's say, our fuel oil activity for the year 2020 and 2021.
And you would not expect any big swings from quarter to quarter depending on the amount of bunkering that's done by the global tanker fleet or global fleet?
I don't think well, obviously, we cannot judge how markets will respond, but I think so far the transition has been less disruptive. If you if you also look at the articles that were presented to us two years ago, If you look how the industry has adopted, how the refiners have adopted, how the tank terminals have adopted and how the shipping industry has adopted, so far the disruption has been not a smooth process, but at least a process which has been gradual. So we haven't seen any major disruptions yet.
Okay. And another question on your impairment that you took in Canada on Quebec City regarding the lease concession. Can you elaborate a bit on that and to what extent it will be a factor in operating the terminal in the future?
Yes. In Camelta, we have a set of terminals. In one of the terminals, we're having a discussion about the longevity of the asset in terms of permitting and licensing discussions related to the asset. We've taken a few on that. The commercial discussions are ongoing.
We felt it prudent to and this is just in line with standard accounting criteria to impair one of the assets see how it plays out. But we fully impaired it. In principle, it doesn't influence the day to day operations as we now see it.
Okay. So it's unclear if lease will expire and when it would happen then?
That is subject to ongoing discussion.
Okay. It's clear that
the lease will expire, but indeed the renewal is still subject of discussions between us and the Board. Yes.
Okay. Thank you.
Thanks. Yuri Danjeri, Kempen. Two question on my side. You have mentioned that you wanna replace the BDA that you have missed from the divested terminal. I was I think we are talking about roughly 70,000,000.
I was just wondering what is the time frame before you're gonna regain that 70,000,000. Another thing about occupancy, can you if you can give us a bit of indication for 2020 and the years ahead, what is the expectation you have? I mean do we can we leave behind our days of low occupancy rate and be more positive for the years to come?
First of all, we don't give guidance on the year on specific numbers. So but I will give you the direction of the sentiment that we have. I think we're well positioned for 2020. The income that we will generate from IMO 2020 and from new assets relative to 2019 give us a very good position to replace asset EBITDA. Our ambition is, as I said, over time to grow EBITDA.
And of course, we will also fight to do so for 2020. But that would be obvious as an ambition. It will depend on market conditions. The dominant factor is indeed the oil market conditions that influenced occupancy. Where we left occupancy, think, is important.
How do we feel about that at year end, 84%? Is that a good place to end 2019 and start 2020? And for us, the answer is yes. The IMO has come back in, so you would have expected perhaps that you would go over the 84,000,000 However, we've also divested the assets and deconsolidated Amsterdam and Hamburg. Amsterdam and Hamburg, occupancy wise, were high occupancy assets.
Value wise, we thought there was better value elsewhere, which we've proven with for us from our perspective, not from the buyers' perspective, but from our perspective, by generating a very healthy profit on the assets and also relative to our business plans as we saw them value wise. But the effect of divesting Hamburg and Westport, you get a drop in your occupancy of about 1.5%. So you come back with IMO, but you reduce on account of the divestments. IMO also builds up in the quarter. And that leaves us with a sense of entering 2020 in a good position.
Obviously, we will have to handle commercial occupancy and maintenance occupancy effects, which we've seen particularly in Bottlec in Europoort and in Singapore. It's a combination of commercial occupancy and maintenance occupancy. And we will work our way through that. But they are in their own right no reasons for us being not optimistic about 2020. I think the dynamics are good.
The new assets are coming in. We did experience a little bit of delay in the delivery of our asset in South Africa in 2019. So we missed the contribution from South Africa that we could have seen in 2019 that was pushed into 2020, a whole mix of reasons. In itself, it doesn't influence the value to the shareholder other than a timing point. But EBITDA wise, we missed that in 2019.
And some other assets are also coming into the play. So on balance, I would only directionally give you the moving parts as I just explained to you. We feel good about 2020. We see opportunity to replace that EBITDA. And business wise, I think we're well set up.
If oil markets turn, that obviously helps. We've now been in this market for more than two years. And therefore, from that perspective, we continue to be at the low end of that earning potential that we've seen in 'eighteen and 'nineteen.
Very clear. Thank you very much.
Yes. Thijs Berkelder, ABN AMRO. I think I have a list of 15 questions. Let's start with three. First, can you give indication of what coronavirus at this moment concretely means for you?
That's a that's an easy one, Thijs. You should look at this in in fear four areas that we consider. First of all, keep people out of harm's way out of the the coronavirus. So we've taken measures both in China and Asia and and even some measures globally to ensure that we we, first of all, can keep our terminals up and running twenty four seven and to ensure that people are not not affected. Very pragmatic things that we've been doing, obviously, when it comes to travel policy, self quarantine, etcetera, a few of those things.
And maybe good to mention, so far, no cases not affected, and we're open for business. Second of all, we do see that the virus might have an effect on demand of oil and chemicals in China. So you would expect that those products which have been produced need to find a home somewhere else. So we see possible changes in supply chains. And we expect that in the initial stages people will try to use existing contracts globally and existing contractual arrangements with us and others to, let's say, take care of their immediate needs.
If that sort of exceeds, if the burden becomes too stressful, then we expect that you might see new contractual discussions that take shape, where people say I need to have a spillover of volume that I need to store somewhere. That's the third thing that you might consider, so that would suggest that in certain locations you would find more volume being stored than less. But then the fourth element is long term. Obviously, we need to look at the long term effects that if we see destruction of basically economic activity because of this in the long run, obviously, the world economy will be affected, it's really hard to judge how that will play out on Vopak as a whole. But those are simply the four things that you can consider in looking at the coronavirus.
Maybe one additional angle, is early days, to keep in mind if this prolongs, that, obviously, China is very important in the supply chain of various goods. So for instance, for construction, we're obviously already, with the prolonged holiday in China, facing a little bit of delays in the projects there. But if that if this were to become a longer term thing, then that could also affect projects abroad with basically for lack of project supplies.
Clear. Thanks.
14 to go, Thijs. The
chemical sector, quite a lot of large IOCs complain about margins in the Singapore area in chemicals. What are you seeing in the chemical space?
I'll make some comments on that in my presentation. No effects in 2019. We have seen no effects in the sort of immediate and present day. Obviously, our industrial terminals, and you know that is not dependent on typical cycles because this is a longer range of what we have. But it's to be seen on what the response will be in Asia particularly.
Then again, you have a short term response is if demand falls, what will happen to the excess material, but what's the effect in the long run? It's hard to see, Thijs.
Do you see already slowdown, say, throughput levels in the chemical chain?
Not necessarily. Okay.
Clear. Then third question for the first time, let's say, ESG. You reported the injury rates, let's say, safety rates deteriorated versus 'eighteen. Is that primarily the cause of being more active on the construction front compared to 2018? Or were there other factors affecting your injury rate?
I have my view, but let Fritz
Yes. I think we have seen, I would say, a period of very heightened construction activity actually for a number of years. So that in itself is not the reason. To be honest, I wish I was more clear as to what the reasons are. I would look at it for now more as a statistical sort of fluctuation that you have from time to time.
If you look at our long term trend, basically, you see that it goes it steadily decreases, but it has a year to year wiggle on that sort of accompanies it. And so this result was better than, for instance, the 2017 result but was less good than the 2018 result. And obviously, our aim our long term aim is to bring down the number. And first of all, remain the industry leader, which I strongly believe we still are, but also to be as good as our best of our clients, our safest clients in this regard, and that's where we still have some way to go. So we're working on actively involving management even stronger in safety through our Trust and Verify program, as we call it.
We are also, I would say, very pleased on the other end of safety. We've completed our Assured 2016 program, which was basically very much aimed at doing those things that prevent major disasters from happening. And although on the personal safety side, we had what I call a major disaster, namely a fatality in Waters. At least you look back over the period, we have prevented any major disasters with any of the Vopak operations on the process side.
Okay. And in addition, some questions maybe on vapor recovery. Let's say, a year ago, you announced a big quite big investments in Vapor Recovery units. You're not yet reporting on Vapor Recovery or maybe this year will be the first year, I don't know, while your competitor is reporting on vapour emissions. When can we expect that?
And what kind of investments are needed there still?
I think we have announced that, first of all, quite a bit of our sustaining CapEx goes into environmental measures, quite a few of which are also related to air emissions, in other words, vapor. On top of that, we have announced that we have a €40,000,000 program to do things that are over and beyond the tightening laws of the various locations. So we are in the process of executing that. But for instance, here in The Netherlands, we've also had some delays because of the difficulties with permitting due to nitrogen, etcetera. So that's a part of the program that we haven't been able we're basically still waiting on permits to proceed.
Also, I think we yes, we are keen there to progress. You should know that there is no, I would say, field way of actually measuring vapour coming off a process. So what we have standardized on is the use of a model for it because that's the best there is. But what we have to keep in mind is but a model. So we want to be a little bit careful.
Therefore, we've given ourselves a number of years to really, I would say, gain some confidence with the numbers we're getting out before we want to go external with publishing numbers coming out.
I'm Mulder from ING. A couple of questions. Cost savings, maybe Gerard would like to say something about it. 40,000,000 was aimed for 2019. So we would like to know what is the effect in 2020 still there?
And are there aims for more cost savings programs? Then about the LNG LPG, can you maybe update me on the LNG situation with regard to Bruinsbuttel and maybe to China? And on LPG, it looks like that you have a lot of ambition. And if we look at the export from The U. S.
To other parts of the world, there's still
a lot of things that are going on there. And are you looking also for The U. S. For export possibilities on LPG storage? Because it looks like to me that you have still land available there?
And finally on ITC, do you discuss with ITC the situation there for them with after the disaster in March with the fire tearing down, in my view, about 15 terminals. And my last question is about dividend payout. Given the good year, I was a little bit surprised about the dividend payout going down from 48% to 41%. Was there not a reason to raise the dividend certainly if you have a March let me say payout range between 2575%, and you are now only at 41% in a year where you created a lot of cash? Those were my questions for this moment.
Shall I take cost savings and dividend first?
Please do.
So cost savings, we have stated in the before we started 'nineteen that we would aim to deliver a cost level to operate the company in 2019 that was at expanded capacity equal to the footprint of cost in 2017. We achieved that. We actually over delivered a little bit on it, but the buildup of that number, we can provide details on how you reconcile it to what is reported. So that is achieved. Now we discussed it further in our budget cycle on how to deal with it in 2020 and onwards.
We think there's more to be gained in efficiency and effectiveness of our spending. And I think the way to look at 'twenty is that we aim to compensate inflation in our budgets. And obviously, we allow for expanded operations that are just coming into the cost levels. But on the base cost level, we compensate in 'twenty at least inflation. In terms of dividend payout, the way I look at it is, yes, you're right.
We have a dividend increase of 5% bringing us to a certain payout ratio plus we have allocated €100,000,000 to the buyback. We think it's a good mix of tools that we'd like to use. And we're very satisfied with the fact that we've, for the first time, best I know, instigated the buyback program to distribute some of our good fortunes in 2019 to our shareholders. Now we are very acutely aware that we also have a strategic preference to invest and invest at attractive levels. So in 2020, we will invest 300,000,000 to €500,000,000 That's relatively high in the history of the company.
We feel good about that. It creates value in the long run. So the mix between the investment growth the growth investment, sorry, the dividend distribution plus 5% and the buyback, think, is a very healthy mix for shareholder distribution and shareholder value creation. So we feel good about that.
Maybe ITC, let me start there. So I think, first of all, we were very happy that our protection measures helped because ITC is a direct neighbor of us in Houston. So by
cooling
the tanks and basically 20 fourseven huge extra effort by our team, we managed to keep to contain the fire to basically outside our fence, although it was literally way too close for comfort. I think in the aftermath of it, obviously, ITC lost the tank park, but our occupancy in Houston was already very high. And I think so I would say the net result for us has been more I would say that we suffered more from the interruptions that were taking place as a result of combating the fire than that we profited in the aftermath would be take on 2019. But yes, all in all, obviously, very concerned that this happened. But given that it happened, I think we're very, proud of the performance of our team and our equipment to keep it to what it was as far as damage to us.
Are you interested if they are going to divest the position there
because of getting each other's shape?
Yes. We have no indication that ITC would want to divest, but we always we obviously always monitor the market for opportunities that could have a synergy. LNG, Fritz? Yes. LNG, I'm trying to remember what exactly you were after.
I'll take Hamburg and China. Yes.
So the progress. Okay. Well, I think, first of all, let's start with Germany. We are, I would say, I would describe it as we're making steady but somewhat slow progress in Germany, and the slowness comes from the very, I would say, rigorous way in which the environmental permitting works in Germany. So we are going through a process that will lead that will last, we reckon, at least until the end of this year in terms of the permit application.
And obviously, even in the LNG world, where basically people are patient, I think one of the things that we have to manage is the customer interest because people, they do have interest in the sort of if you can deliver within an acceptable time frame. But yes, we cannot be very specific about the time frame yet because we're still in the middle of this environmental process. And in China was the other one, believe you asked. There, I would say, it's similar but for a different reason. I think we are ready to go, but we wait for the final go ahead of the Chinese, basically, planning, are working on a master plan for LNG distribution in China, and they are looking at which locations would or would not fit into that.
So there, we have basically contractually with our customer everything agreed, we need this final go ahead from the central authorities.
Alan. Kepler. Four questions. First question on the utilization rates. You detailed that the disposals had an effect of 1.5 points.
If we look at Sheet 13, should I take it that the effect of IMO once all the terminals are operational will be an additional one point or so compared to the 84% of Q4?
What we said in Q3 is that we were then at 82%, right? We said IMO would have an effect of coming back into the fray of about 5%, right, so relative to Q3, which was at the bottom of taking out the majority of our capacity. Now that capacity has, in terms of occupancy, come back, but it was offset by, for instance, the divestment. The only one where you now have an occupancy point still is Panama, which is in its early phase of commercial start up. And obviously, on IMO itself, the commercial effects of the occupancy that started to come back in Q4 will be throughout 2020.
So the occupancy number precedes, I guess, the full effect of the year.
And especially, if you're talking about various settlements in Asia, Middle East and China, especially in China, the impact seems to be quite large in Q4. Can you give us a bit more detail about what the impact has been of these various settlements on results?
Yes. As a point that we indeed highlighted, the settlement in Haiteng, we highlighted that not for reason of qualifying the results. We highlighted it for reason that Haiteng has been a subject of long discussion in terms of it coming into our portfolio than being idle for a while because of the incident at Haiteng, and it's now coming back. So we have settled the commercial discussion now with them. And the effect that you see in Q4 of that whole backlog discussion was an €8,000,000 support in the number.
However, if you look at the total number, the $2.00 5,000,000 that we reported, there's many pluses and minuses in that number. And in aggregate, I'm not going to say that €2.5 was not solid. The €2.05 is a good number. The only item we specifically highlighted was Haiteng. And it is a variety of many different moving parts in those numbers.
Some, let's say, nonrecurring, if you use that term, cost items, some commercial settlements, some insurance settlements, either favorably or unfavorably. If I add that all up, it's not something that I would qualify the numbers on. So I think the two zero five is just a good number.
It's not to depend on big terminals. So should we assume acquisitions to reach that €500,000,000
The simple answer there, Andre, is that we have 1,500,000 cubic meters under construction still in 2020. So part of the capital contribution will go to completing the growth program that has already started. Then the second thing is if we announce growth projects throughout 2020 and commence construction or fund equity for joint ventures to commence the project, also that will be included. And indeed, the last one, the last third pocket that you can consider is indeed acquisition. So it's a combination of all, and we've made our best assessment on where we think that number will fall throughout the year depending on how these business development activities will play out.
What amount would then be left for 2021 and 2022?
We haven't guided on that yet. I think it's too early to tell. We'll let you know in twelve months' time on that.
But based on the current projects, the projects that you already have in hand, how much more would you have to spend in those years?
Well, a typical project, Fritz, correct me if I give the wrong time line, but typically, it's like twenty four months for building a site. So if you take our commitments now, part of them, of course, started last year or even before that. And purely on committed numbers, the investment goes down in 'twenty one, 'twenty two. However, that's not necessarily what we expect. We have a very healthy list of what we call targeted or aspirational projects.
And we would like to spend that level of money if we can. In all fairness, 2019 and 2020 relative to what we've seen in the past were high CapEx numbers. So you would really have to be very successful to continue to repeat that. Now we hope to be successful, but I think, well, that's as best as I can give you a flavor for the number.
Another way of looking at it, Andre, is that we have so we announced the shifts in our portfolio. We announced the investment digital. We don't want to give a signal we're going to rest in our laurels. We believe that we can continue the strategy as is, and that's where we want to signal another 300 to 500,000,000 investments in growth. Obviously, and I think that's the caveat subject, that's why there's a range subject to market conditions depending on how the global economy will shape down, how the oil markets will develop, how the chemical markets will develop, and how the gas sector will react to the current pricing environment, obviously, might change the dynamics in business development.
So I think it's not the way we see it. We're not opportunity constrained. We just need to wait to see how things are developing. And we've been to echo what Gerd was saying, we've been very successful in the last few years in creating momentum in finding these business development opportunities for Vopak. So this is how you should read it in combination with end growth and redistribution.
It's not either one of them, it's both.
Can you give a bit more detail on your statement that you're looking at further hydrogen projects in Europe for this year? Where? What?
Well, that's I mean, I said it in my presentation. I think we believe that if you look at logistics of liquids in the long in the long run, so how porous will be used, ultimately, you need to find an an to to move or store electricity simply because we see a ramp up of renewable electricity that will come into global markets. If you read literature, if you talk to industry actors, you see several opportunities for electricity to be stored. Most of them, if you look at large scale industrial, it involves one another around hydrogen. Either take a hydrogen molecule with nitrogen, make it into ammonia, or the LOHC, which informed you on recently.
We want to build up capabilities at Vopak. Think the good thing is we have the sites, so we have the locations. Mostly it's within large industrial centers where a lot of hydrogen might be consumed. So what we need to understand is sort of what technologies are there and how do you develop skills and capabilities to either store and move that around. And we we have now made a few modest investments in understanding what the capabilities are and technologies, and we are now attaching ourselves to certain partners in which we're developing, can you actually build a supply chain of hydrogen?
So what we are considering is to see whether we can build the first hydrogen supply chain, so that means to produce hydrogen somewhere, not in The Netherlands, to either pack it or connect it, bring it to Rotterdam, unpack it and start using it. And this is this is an investment which will not be for industrial scale to be competitive with the conventional methods, but it will be to test and to show and demonstrate that the technology is is viable at at tariffs and rates which are within the bandwidth of which are economically acceptable. So what you can expect is that, particularly if you look at the focus here in The Netherlands and our capability in The Netherlands, is that we will be looking for a small private investment to demonstrate you can bring hydrogen into The Netherlands. That's our thinking today.
And any guesstimate of what how large that could be in time compared to your current scale?
Well, the I mean, I'm but this is this is far beyond the the time horizon that you and I are sitting here at the at the I'll be longer time. So but I'm no. I mean, but that's that's as as I think most most scientists and most people and also Volkmann believe is that ultimately, there there is huge potential if you take a long enough time frame. I mean, if you take thirty, forty years down down the road, even then, if you look at how long it's how long it's taken for oil to become the predominant fuel, there's such an infrastructure requirement that needs to put against it and such a change in in supply chains that it it will take it will take a while, aren't they?
I think it's also fair to say that Vopak has the capability and the mindset to be at the front foot on this and to explore that value chain and commit our resources. We've experienced that it's very easy to map to our existing skill sets, I. E, connecting supply and demand, finding the right commercial drivers to do so, selecting the location using our existing infrastructure. It maps from that point of view conceptually very nice to what we do. What you see with new energies in particular is they start very fragmented and then you the trick is can you scale them
up. Mhmm.
And we wanna be at the forefront of that. Okay.
Let's see if there are any questions from the people that are dialed in. Mariela, could you check first, please?
Okay. So we do have a question from the line of David Kerstens from Jefferies.
I've got three questions, please. First of all, on the occupancy rate in the fuel oil storage capacity. I think I heard you say you're well positioned to end up in the range of 85% to 95%. But with all capacity fully contracted, would you not be towards the upper end of that range? So maybe even at 95%, is that not fully contracted?
Why would you still be potentially in the 85% to 90% range? Then the second question is on the outlook on the markets. I think I don't think I've heard you so positive, Helko, on the market outlook in recent years, but only a short term impact on crude oil storage. Do you currently already see an improvement after the recent drop in the crude oil price and the flattening of the forward curve and maybe even a slight contango on your occupancy rates in the hub locations in crude oil storage? And then the third question is regarding the new digital capabilities.
I understand your cost savings program has been realized. How do you see the financial benefits of these investments? I think CHF 90,000,000 you said over the last three years, another CHF 120,000,000 going forward. How do you expect to monetize these investments? And where will we see the impact on the results?
Thank you very much.
Okay, David. Well, let's again go revisit occupancy rates. And then in my words, think the two things we need to manage is out of service capacity and commercial occupancy. Those are the two things that have been visible on the radar screen of everyone in this company because that ultimately dictates our earnings capabilities. We had large or unusual high out of service capacity for fuel oil, and we've signaled to you that we have closed that gap and that all the out of service tanks for fuel that were destined for the low sulfur segment have been have been returned back to markets and have been rented out.
Yes? Then the second thing is that we have obviously, besides the fuel oil turnaround, we still have out of service tanks because we have our normal inspection programs and our normal maintenance programs. We have, however, a few larger programs that was highlighted by Gerard. One is in the bottleneck where we have taken two tank pits, two complete tank pits out of service to do it in one go. We have normal out of service capacity for tank inspections in, for instance, the Europoort, and we have tank inspection programs in Sbarrok in Singapore.
We have programs for all three to bring those large out of service projects back into business. So how you should visualize that is that throughout 2020 you'll see all the way at the back end of the year, slowly but gradually, those large programs coming back. So we are working to get that organized. Then at the back of that, the question is that when those tanks are coming back, is the market structure such and is the market capability strong enough to actually fill it? Because if you bring back the out of service but you don't fill it, then obviously your commercial occupancy is not contributing.
As I said, why is there 85 to 95 guidance on fuel? Simply low sulfur is, as I said, rented out, but there is still a question on how the high sulfur volumes will move. So that's where we are keeping a little bit restraint and giving clearly a signal saying, no, it's fully committed. There's still a bit of work left there. But the signals are looking strong.
If you then look at the outlook of the markets, and that is do you see any short term, let's say, positive sentiment there, and I think that was also signaled by Gerard, I think there is reason to believe that we can or a there's reason why we're confident about 2020. And and that has to do with that coming from coming from a situation whereby gas and chemicals have been very steady, The question always was, is some activity happening in the oil markets? And the oil markets have been, from our perspective, exceptionally benign in the last two years. So now the on the back fuel oil developments, but also on the back of now the drop in demand, we see indeed that activities are starting to show that the curve might change. It's very early indications that the structure might change.
But to answer your question, David, no, we cannot say for sure, but we are hopeful that there might be some upside in the oil markets as we look at that, yes? And then if you look at new digital capabilities, I think also in the interest of time, I think there we are very supported by the rollout of the software and that's what we've been radiating in the calls. We think that the adoption rate and implementation is working very well. I think the data that we're collecting from the terminals is assisting us also and is very supportive. But we always mention to you as well, David, is that do not assume any major contributions from this program until we've sort of completely rolled it out.
I think Gerard mentioned that as well. We are now really investing in the capabilities. That's where if you look at the slides that Gerard represented, you see that there's also in the head office a column that represents an increase in spend because we now are still in full rollout mode of that of those capabilities. If you look at our total cost base, I think that's our ambition there is that if you look at the efforts we've been doing in the last three years, maintaining where we are today And if you look at the requirements that are being put onto Vopak, I think we see further tightening and better investments and capabilities in cybersecurity, better capabilities, as I said, in IT and data. We need to have better service for our customers to ensure that we heighten the efficiency.
We expect governments to invest for us in further sustainability impairments. So in other words, the way that we conduct our business is also becoming much more complex and much more demanding. So for me, keep the cost already at par, think, is already a good indication of how well we are at managing costs. And I think it's a dialogue that we need to entertain with the industry in that if demands are increased and with governments, there needs to be a moment also for the industry to earn it back. So I think that's just a general remark that I think is applicable to the industry.
So long story short, David, I think new digital capabilities, positive about the capabilities, don't expect anything in the short term because we're in full rollout. And if you look at the cost, I think that we're maintaining it, but we need to be signaling to our customers that profitability needs to be maintained. I hope that gives a perspective.
That's great. Thank you very much, Ilkka.
Okay. It doesn't look like we have any further questions registered on the telephone lines. So I'll hand the call back to the speakers. Please go ahead.
Geiszberg Elder again, ABN AMRO. Looking at your Slide 31, your portfolio transformation road map. It is logical to assume that you are looking at further divestments, especially in oil, And then probably thinking about Fujairah now being at probably peak profitability, peak occupancy, why not?
No, you should not draw conclusions from this slide that we are in the business of selling oil terminals. I think all the choices we've made, let's say, were very purposeful on the geography that the business represents, but also the connectivity that it has to industrial states, for instance. We've made a clear choice in Europe to go back to Rotterdam and Antwerp and have the core of our activities there because we think that the integration with assets provides us some longevity to the business. I think what the slide represents is the direction in which we're thinking. And so you could assume is that the portfolio of projects that we entertain is tilted more towards the gas and industrial terminals than it is towards auto.
So it's more the direction, Thijs, than it is already a planned cast in stone. Looking at further divestments? We are well, I think it's a continuous project process, Dijs. I think we started that in 2014, as you might recall, when we announced our first divestments. I think that we've taken a look that you need to continuously look at your portfolio and update your view on where markets are heading.
So I'm not excluding divestments nor is the goal in itself. Continuously look at that.
I think it's fair to say that Vopak has a very realistic view on its assets. If we intervene on the portfolio of assets, it will be because of very clear indicators, strategic direction, value performance, execution capability. And we've proven I think also in 2019 with the divestment of some assets that I don't think many parties in the market would have expected that we would execute those. I think we are perfectly positioned to take the decision if we feel we need to. So we will not shy away from divestments if we think strategically and value wise it makes sense.
There's no, however, targeted divestment to free up cash or something like that. That is not the case. It's strategically driven.
Good. That wraps the questions. Ilkka, do you have anything to further add?
I would like to give one last one because I see that, did you say the question? You were so anxious. Want to give you the And then we'll round it
Quirijn, again, on the €275,000,000 let me say, euros $750,000,000, $850,000,000 maintenance CapEx. If I compare that with the €275,000,000 in the last couple of years and I also compare that with, let me say, extra €40,000,000 for IMO twenty twenty CapEx and we also take into account that the number of older terminals were sold, Why is there still that amount in the range of two, let me say, $750,000,000, euros $850,000,000? In my view, the new terminals should not contribute that much. And I also would like to come back on my question on LPG because there's a nice area no, I'm sorry, but I asked that question already about a nice area in Houston you And have some land maybe you can say something say about this purpose of that land.
Yes. I
think on account of the indication we give on sustain and surface, first of all, of course, on the divestments, West Port and Algeciras weren't old at all. They were relatively new assets. So the surface sustained burden, if you wish, or commitment, if you phrase it as we look at it, is relatively light on those assets. It is fair to say that we are bringing in a fair bit of new assets into the portfolio. So I do see your point.
What we also see is increased requirements in terms of, let's call it, license to operate expectations of society or port authorities or governments in terms of whole combination of factors ranging from environmental to personal safety to process safety to emission management, etcetera. So that does put pressure on the assets. But the way we look at it is we'd like to discuss service and sustain in its own merit. So we say, is this what we want? Is this what is needed?
Do we want to even surpass expectations because we know best in the industry? Then we also look at is that in balance with what the asset actually can generate. Now if, let's say, that would be out of balance and it would be a demand of society to position assets this way, then at a certain moment, there must also be a revenue stream that is attached to that expectation because we're not going to last very long if we ignore that. If we can't work our way through that, then we will intervene in the asset, not we will not cut back service and sustain because we think it's too much. Then have to decide I'm going to intervene in the asset.
Now that uncertainty of that whole discussion, I think, is fair for us to signal to you that it's €750 to €850 And we will have discretionary decisions and debate in the company on how to best spend that. Reality is that in 2017 to 2019, we had a budget of $7.50 and we spent $7.11. It's a fair indication. It's a good indication. It highlights some trends in the industry.
I think we do have a way of earning it back in our business model. And we'll see where it ends.
Okay. In
the world now for for LPG to China, to India. It's growing rapidly. We have still some land available, so since 02/2014, I think. So I'm interested to know what your plans are there or whether there isn't LPG an opportunity?
Do want me to, yes? I think, in principle, yes, is an opportunity. In practice, though, it depends on a lot more than just having a proper plot of land available. And one of the key things there is there's an extensive pipeline grid in Houston for distribution. So we need to basically be able to get agreement with the various owners of that grid in order to make something work.
And also, I would say, at this stage, there is, of course, existing infrastructure that is working fairly well already in Houston. Yes, it's a possibility, but it's not a slam dunk to get this done.
I think worldwide, though, we are looking at how that abundance of LPG in supply and demand connects. So it might also be an import market. So we try to create opportunities. It might be an export market. We've established Canadian export.
Houston, Fritz has explained, sounds logical, but maybe not always that easy. And there are import markets where I think we are focusing on as well to connect that supply. It might even be, in a way, easier at the import side than at the export side, certainly in The U. S.
Thank you. Then in closing, twenty nineteen, as we mentioned, was a successful year for Vopak. And we informed you that we've made great strides in the execution of our strategy, realized a strong EBITDA for the year with significant growth in earnings per share. What you can expect with us is that we will continue to hold this course for the coming years, which you can expect that we will maintain our focus on short term financial performance. And similarly, very hard to set ourselves up for long term value creation.
So thank you for attending the call. Very much appreciate it. Thank you for those who are here. And I wish you a fantastic remainder of the day.